Agents opt for joint custody

One of the fall season’s most promising new entries, NBC’s “Veronica’s Closet,” came together when two ultra-competitive talent agencies agreed to something unusual — sharing their business.

The show’s packaging fee will be split by International Creative Management, which represents the “Friends” writing-producing team of Kevin Bright, Marta Kauffman and David Crane; and by Metropolitan, which reps series star Kirstie Alley.

The crowded landscape of primetime TV has created a new demand for talent, forcing once-fierce agency competitors to lay down their swords and to sign on the dotted line.

Agency packages — which include a cut of the studio’s license fee and a piece of the backend profits — are payment for bringing key elements of a series together. Networks and studios have shown a willingness, albeit reluctantly, to grant agency packages for fear that talent will walk down the street and sign somewhere else.

TV packaging has become one of the most lucrative revenue streams for the agencies, and even some of the most ardent rivals have found themselves doing business together and splitting the rewards.

Creative Artists Agency and William Morris split the package on “Michael Hayes,” the new David Caruso series from Columbia/TriStar. CAA repped Thomas Carter, Nick Pileggi and John Romano, three of the series’ executive producers; Morris reps Caruso.

Some of the biggest shows with split packages are “Cracker,” which William Morris is sharing with ICM; “The Gregory Hines Show,” United Talent Agency and Endeavor; “Fired Up,” ICM and Broder Kurland Webb Uffner; “The Tony Danza Show,” ICM and Broder; and “Union Square,” which the Rothman Agency is splitting with ICM.

According to Daily Variety’s own poll of the fall lineup, compiled from network, studio and agency sources, CAA came out on top, with 24 packages, five of which are split with other agencies.

William Morris had 14, including six splits; UTA 12, with five splits; ICM 11, with seven splits; Broder 10, with five splits; Endeavor nine, with two splits.

Daily Variety’s figures do not include midseason shows, and none of the major agencies would comment on, or confirm, any of these figures. There are also two caveats: Not all fees are equal, and not all splits are 50-50.

The numbers are a political hot potato, especially with changes at the top of certain agencies. Almost two years ago, William Morris’ TV topper Bob Crestani was succeeded by Sam Haskell. CAA lost Bill Haber, to be succeeded by Lee Gabler. Last year it was UTA’s turn: It lost Gavin Polone, with Jay Sures and Chris Harbert taking the reigns as TV heads.

Unanimous approval

Naturally, in each case, competitors predict that the reconfigured agency will be weakened by the changes. But the fact is, all are still major players in the TV biz. And virtually every agency has the same response when it comes to describing how they did with packaging shows: “We had a great year.”

Agencies shy away from publicly touting their packaging scores. Less important than the number of their shows on the fall sked, they say, are the number of returning shows, which ultimately have a better chance of reaping a hefty backend.

The sheer number of failures last year denied many tenpercenters a big payoff. Take “Ink,” which was recently canceled. It was a high-profile split package last year, with Endeavor repping producer Jeffrey Lane and CAA repping the show’s star, Ted Danson.

Says Gary Cosay of UTA: “Getting a show on the air is like hitting a single. Getting a show on the air that stays on the air is like hitting a home run.”

In terms of packages on returning shows, Daily Variety estimates that CAA has 19; William Morris has 17, UTA has nine, ICM and Broder have five and Endeavor has four.

While agencies waive their commissions on their clients when taking a package fee, they can command 3% to 5% of a program’s license fee, and up to 10% of the backend.

William Morris, which wrote the book on TV deals by packaging shows like “The Andy Griffith Show” and “Gomer Pyle USMC,” has long had a reputation for commanding higher packaging fees — as much as 5% of the license fee, while others hover around 3%.

So if a studio gets an $800,000 per episode license fee, the agency collects $24,000. And if that series is a success in syndication, the agency gets a share of the gross profits.

With shows like “Friends” selling for $4 million an episode in syndication, it is not difficult to see why agents would forego client commissions for a share of the backend riches.

All in the packaging

For boutique firms that in the past 15 years have made their mark repping TV writer-producers, packaging can keep the lights on during the lean years. For large agencies, packaging has become their bread and butter.

In contrast to movie packaging, the term “package” has a much looser meaning in TV. While agencies used to have to bring several talent elements to the table, now just one element of a series deal can command a TV package. High-profile producers like Aaron Spelling, repped by CAA, and actors like Bill Cosby, repped by William Morris, long have commanded a package on their own.

And one agency can rep the top talent of the show while another tenpercentery has a big share of others on the staff.

But the show was created by CAA client Paul Attanasio, and its other exec producer is Barry Levinson, who at the show’s inception was a client of CAA (he’s now with ICM). The package went to CAA.

Studios, which pay the packaging fees, have long decried the practice — some execs calling it extortion — and are quick to point out that the packaging fees are the only part of the production that doesn’t appear on screen.

“It’s tough. There was a time when agents had to do some work to get a package,” said one top studio executive. “Now it’s just leverage. It’s not my favorite part of the business, but it’s a reality.”

Some execs point to cases of abuse in which agents at the last minute have refused to send their client to work unless the agency received a package on the show — a move that could bust a deal entirely.

On the flip side, some top producers like Steven Bochco will not let their series be packaged, even when there is a tenpercentery that does rep many of the elements.

UTA, for instance, reps two stars on Bochco’s new CBS series “Brooklyn South,” but the agency receives no package fee.

Added burden on hours

For the studios, the costs of giving a packaging fee are particularly acute for one-hour dramas, where the backend syndication profits are lower, and producers often barely recoup their costs without aggressive international sales. Agencies taking off the top only adds to their worries.

Par and Universal take a hard line on the issue of packaging, almost never giving drama packages. (Endeavor, according to sources, received a “very small package” on U’s upcoming fall drama “Timecop.”)

But such a holdout stance also risks alienating the agent community — and in return their talent roster.

Some agents suggest that the austere mentality at U may have had something to do with the studio’s development difficulties. U TV president Tom Thayer, one of those adamantly opposed to packaging fees, recently found himself on the short end of the fall season’s hot projects. Last week, he resigned from his post and signed a production deal there.

If one studio refuses to pay a package fee, agents can always take the material elsewhere.

“It is a constant push and pull of what is right and what is fair,” said one production exec.

But even wary studio execs have come to accept packaging, even praising tenpercenteries for their help in servicing the show once its on the air — when it is earned. And agencies have been willing to defer their fees in the name of curbing costs and getting a show on the air, studios execs note.

Added incentive

When packages are involved, some agents actually have more of an incentive to make sure a show gets on the air and stays on the air in the right timeslot.

Studio execs say Endeavor, for instance, has been extremely aggressive in dealing directly with the networks and performing many studio-like functions.

When it works, an agency is there to supply the show with new writers and guest stars, or to help negotiate license fees in future seasons. (ICM client Julia Roberts shows up on “Friends.”) Or they are involved in the inception of the idea, truly linking talent with writing staffs.

“If we are not scrupulous about servicing our packages it will give packages a bad name,” said Nancy Josephson of ICM.